Transparency International Zambia (TI-Z) commends the Financial Intelligence Centre (FIC) for finally releasing the long-awaited Typology or Trends report for the year 2020. TI-Z was among key stakeholders who dismissed the annual report released by the FIC in July 2021 as being “shallow and lacking in detail” due to the fact that it failed to provide a breakdown of the forms of corruption and other financial crimes being perpetrated.
However, while we are happy that the FIC has now released a report that is more comprehensive, albeit broadly focusing on two issues, we are concerned about the extent to which the FIC appeared to have fallen prey to intimidation by the previous Patriotic Front regime. Our reading of the Typology report clearly shows that this was not a report that the previous administration would have wanted to be released prior to the 12th August elections, and there is little doubt that pressure was exerted on the FIC not to release this report, culminating into the release of the shallow annual report the nation was subjected to in July.
Through a detailed analysis of the 2020 Typology report, TI-Z has noted that the report focuses on corruption and tax evasion as the two prominent predicate offences and explains the link between corruption and non-compliance with tax obligations. TI-Z finds it upsetting and a complete disregard for the wider interests of the people of Zambia that Prominent Influential Persons (PIPs), their associates and Political Party Sympathizers (cadres) in the previous regime have been at the center of corruption and tax evasion, as revealed by the report. According to the report, PIPs have been using their positions in public institutions to influence the awarding of contracts to companies in exchange for gratification in the form of cash, real estate and motor vehicles. The case studies shared in the report paint a disturbing picture of some of the mechanisms through which the country’s resources were being plundered. For example, the report highlights that some PIPs incorporated a company that was used as a channel to receive bribes from foreign owned construction companies in order to facilitate the awarding of contracts through single sourcing. This is evidence that the infrastructural development agenda which the PF regime made the central theme of their campaign for the just ended elections, largely became a conduit for unbridled corruption under the regime. Through this type of corruption, contracts were awarded to individuals with advance payments without any intentions to execute the works.
Another case that raises concern relates to suspected illegal mining and trade in precious metals, again involving PIPs holding positions in public institutions and a political party. The report highlights how members of a local mining community were induced into illegal mining whose outputs were sold by the PIPs, who realized over K160 million from this illegality.
We are convinced that the lack of strong political will to fight corruption enabled these and many other cases to take place and consequently resulted in the country being robbed out of its much needed public resources through corruption. We note that the number of disseminated intelligence reports on corruption increased from 4 in 2019 to 14 in 2020, and this resulted in the amount of money lost to corruption increasing by over six times, from K332 million in 2019 to K2.2billion in 2020. For us, this alarming increase confirms the suspicion we expressed in our analysis of the 2019 report that the amount lost to corruption would in all likelihood be higher if more intelligence reports were analysed by the FIC.
TI-Z also notes with worry that neither the annual report released in July nor this Typology report gives information on wildlife and environmental crimes, which were described in the 2019 Trends Report as “posing significant risks to the financial system and to society as a whole.” We are concerned that environmental crimes, particularly in relation to the illegal harvest, transportation and export of the prohibited rosewood popularly known as “mukula” are being frozen out of the FIC’s analysis, which poses a danger of them going undetected and the country potentially continuing to lose millions of kwacha through these crimes. We urge the FIC to give an update on what the picture looks like in relation to the environmental crimes they highlighted in the 2019 Trends Report.
In light of the findings of the FIC Typology report, TI-Z calls upon the new UPND government to address the challenges associated with corruption within the public procurement system. There is no doubt that the country has continued to lose huge amounts of public resources through corruption in procurement processes and other mechanisms as highlighted in the Typology Report, and government must not only take the necessary action to address this seepage, but also be seen to take that action.
We also urge the Anti-Corruption Commission to find a way of providing feedback on the progress made with respect to the 14 corruption related intelligence reports disseminated by the FIC. We are convinced that only when there is strong follow up of these cases and mutual accountability among the different institutions or law enforcement agencies involved, will there be real progress made.
Lastly, we urge the new government not to adopt the intimidatory tactics of the previous regime over the FIC, but to give this important institution the latitude to operate professionally and independently in the real sense. We believe that a strong FIC that is free of the influence of the Executive will contribute significantly to the success of the anti-corruption crusade in Zambia.
Maurice K. Nyambe
TI-Z Executive Director
